• Mexican Peso hits a six-day bottom on Bostic comments.
• Banxico minutes reveal concerns over Mexico’s slowing economy and sticky service inflation, hinting at more rate cuts.
• US inflation data came in slightly higher than expected, but weaker jobs data tempered the possibility of aggressive Fed cuts.

The Mexican Peso lost some ground against the Greenback after hitting a six-day low of 19.61 following the release of US data. In addition, the Bank of Mexico revealed its September meeting minutes, in which the central bank hints that further interest rate adjustments loom. The USD/MXN trades at 19.52, up 0.18%.

Banxico’s minutes showed that all members agreed that the economy is weakening and acknowledged that it has been losing steam since Q4 2023. Consequently, they mentioned that consumption slowed, and some members even said it stagnated.

Regarding investment, the minutes showed that it “has continued registering a lack of dynamism since mid-2023. They noted that this was observed in all its categories.

In the meantime, most members agreed that Mexico’s inflation has been improving, though it is still facing challenges. All Banxico officials stated that service inflation remains stickier. Despite this, the central bank noted that “the Board expects that the inflationary environment will allow further reference rate adjustments,” opening the door for additional rate cuts.

Aside from this, the latest US inflation report showed that the Consumer Price Index (CPI) in the headline and underlying figures were slightly higher than foreseen, which might warrant no rate cuts if not for weaker US jobs data. Initial Jobless Claims for the week ending October 5 jumped sharply.

Meanwhile, Federal Reserve (Fed) officials continued to cross newswires. Chicago Fed President Austan Goolsbee said inflation came near estimates, adding that data showing no deterioration in unemployment would “relieve” some concerns.

The New York Fed's John Williams said the economy would allow for additional rate cuts. He added that they would remain data-dependent. He expected inflation to end at 2.25% in 2024 and GDP to hit 2.25% to 2.50% by the end of the year.